The markets finally broke through the trading range today, and not surprisingly it was to the upside. The S&P broke through the 1180 level convincingly. Volume was again "missing" but that really has not been an issue throughout this rally.
Let's have a look at the weekly charts to see at what levels we could expect to see the next resistance.
S&P - The next resistance level is 1200. If we manage to cross that, the weekly MA(200) lies ahead at 1225. BTW, looking at the weekly chart, doesn't it look like we have a rounded top forming? That's what it looks like to me! Let me know what you readers think.
Nasdaq - For Nasdaq, expect resistance at 2500 levels. This is right at the top of right shoulder that formed in August 2008.
Personally speaking, I had a decent day today. I saw the casino stocks - LVS, WYNN, MGM - breaking out and decided to go with LVS due to the better volume pattern early in the day. Instead of trying to get in before the breakout, I waited for it to cross 22.16 - highs of the day before it started consolidating - and also for the manufacturing numbers to come out at 10 before getting in at 22.20. I am pleased with the patience I showed there, which as the regular readers of this blog know doesn't come very easily to me. Seeing the resistance at 23, I decided to get out at 22.96. The plan was to get back in if 23 broke on good volume. Well, that did happen dear readers but as I was away from my desk at work when that took place, I missed out. Oh well. Still, a decent gain.
I also took a position in OCLR at 2.83 but that didn't seem to be in a hurry to go anywhere. This could run on a break of 2.86. Close to the end of the day, I also got in RDN at 17.08. You just can't stop the mortgage insurers! I think PMI is up over 40% since I called it last week! I will most probably get out of RDN and OCLR positions early tomorrow as apart from a few minutes at the open, I won't get time to watch the markets till around noon tomorrow.
I will be back later tonight having a look at the casino stocks. I believe they still have room to run some more from here.
Take care and good luck!